20 Reasons to Kill the Corporate Income Tax

http://www.americanshareholders.org/2008/08/20-reasons-to-k.html ^

[nateriver]

Or 20 reasons why Pelosi and gang need to be “booted”.

[television is just wrong]

Something I haven’t heard for a while because they of course want Dem controlled everything, is that we the people like a divided government...

[Mad Dawgg]

There is only one problem with such a measure.

Unless Congress Cuts the budget then there will be a need to make up that lost revenue somewhere else.

So either you "raise the taxes on the Rich™" or raise the taxes on everyone or engage in deficit spending.

None of which help the situation.

Remember the economy/market is like water it seeks its on level. A.K.A. you can't raise the water on one side of the bathtub.

[B4Ranch]

The Republicans are supporting a Socialist and you post this crap. Taxes are going to go out of sight if McCain gets in. God only knows what they’ll do if the Communist gets in.

[Mogollon]

Unless Congress Cuts the budget then there will be a need to make up that lost revenue somewhere else.

The resulting boom in the economy and additional hiring by corporations would make up for the lost taxes.

[Mad Dawgg]

"The resulting boom in the economy and additional hiring by corporations would make up for the lost taxes."

I see.

Currently the Bureau of Labor tells us in their August report that there are nearly 9 million people who are employable but not employed in the USA. (Even less who are looking for a job.)

So with this miraculous new plan and no cuts in budget theses 9 million (which would be an unprecedented event being there would actually be a 0% Unemployment rate) will make up the 354 Billion dollars that corporations paid in 2006? (2007 numbers aren't in yet) That's nearly 40 thousand bucks in income taxes per NEWLY Employed Worker.

Sorry but the numbers don't work out for such a claim.

[Sarajevo]

God only knows what they’ll do if the Communist gets in.

Then there will be no taxes. He'll make it so he owns everything and we will be serfs.

[Kellis91789]

Have you forgotten that a shortage of workers causes higher wages ? So you get additional taxes from ALL workers, not just the newly employed workers. And an expanded economy and eliminated Corporate income taxes means higher stock prices and dividends, which is minimum $354B additional income plus savings of tax overhead costs (estimated as hundreds of billions of wasted effort) that Corporations can now pass to shareholders which will then be taxed at the individual level.

So the $354B “lost” Corporate income tax revenue is replaced by individual income taxes coming from many more people than the 9 million new employees — essentially it comes from 150 million wage earners and investors. The additional income to all those people is all taxed at the highest marginal rate if tax brackets stay the same.

That said, I would not advocate shifting the Corporate Income Tax to Individuals. I’d eliminate it and the Employer-side Payroll Tax and replace them both with a 5% Gross Receipts Tax. That would still save all the waste involved in tax accounting that the income tax causes, and stop giving corporations a reason to make themselves appear unprofitable — it would be a tax to do business whether profitable or not, rather than a punishment for being profitable.

[Mad Dawgg]

"Have you forgotten that a shortage of workers causes higher wages ?"

Of course not, however HIGHER wages mean Higher production costs. Further if you believe that we will ever come close to 100% Employment then you need a refresher course in economics. 9 million employables are out of work rght now but only a little over 5 million are actually Looking for a job. (According to the Bureau of Labor.)

That 354 Billion (And remember that is two years ago numbers and the Budget goes up Every year.) is not collected in a vacuum. Corporations hire people to deal with Corporate taxes such as lawyers, accountants, and financial clerical staff. Those jobs will be gone so those folks will have to find new work somewhere. Where will those jobs come from?

The tax compliance industry is huge and to eliminate over one quarter of it will have unintended consequences. I am all for eliminating government 'make-do" work like Tax compliance BS but to claim that eliminating such will magically transform the economy overnight is ludicrous at best and shows lack of understanding of how complex our system is.

Further if you spread that 354 billion across the work force that is still an increase of over 2 grand per person. Even at the highest marginal tax rate its hard to believe our salaries will increase that dramatically. Especially since a goodly number of high paid corporate tax specialists won't have jobs anymore, as well as all the staff that helps in Corporate Tax Compliance.

Also an entire division of the IRS will be rendered useless (not that that's a bad thing ;) ) but those folks are gonna need jobs too ya know.

[Kellis91789]

First you complain that there isn’t enough unemployment to allow for an expansion of employment. Then you claim all those tax accountants will be unemployed. You can’t have it both ways. That is where the additional highly skilled workforce will come from for all the new businesses that start up — doing regular, productive accounting and legal work instead of government required make-work.

Yes, two grand per worker sounds like a lot, but it is only an average $8K per worker increase in salary plus investment income. Averages are misleading. Just as less than 10% of families pay more than the “average” tax bill of $10K per family member, the additional tax revenues from higher wage and investment income would be likewise skewed toward the high earners. Some people will earn millions more every year from the expansion in the economy and pay millions more in taxes as a result. Others will get small raises and pay small amounts of additional taxes.

[Mad Dawgg]

"First you complain that there isn’t enough unemployment to allow for an expansion of employment. Then you claim all those tax accountants will be unemployed. You can’t have it both ways.

Interesting you confuse the unemployment issue I say there isn't enough unemployed to make up the 354 billion deficit and would be even moreso since many folks would lose their jobs in corporate tax compliance. Realize that Tax compliance doesn't affect how many widgets one can make. It just siphons money away from the business.

If you use money that was earmarked for tax compliance in other parts of the business it does not automatically mean you produce more widgets. Demand for Widgets does not automatically increase just because Corporate Taxes are eliminated. For instance just because Cars prices go lower does not mean people automatically buy another car. Price is just part of the equation.

Which brings us back to the main point, the only way to truly fix the system is lower the water on BOTH Sides of the tub at the same time, because like water, the economy/market will seek its own level.

IOW Eliminate the Tax but cut the budget as well and realize that in the process lots of folks will be displaced in the job market while it sorts itself out.